Our Talc Litigation Team is monitoring Johnson & Johnson’s second bankruptcy attempt. In April, the Third Circuit determined its first attempt failed the financial distress requirement.
Mere months after the U.S. Court of Appeals for the Third Circuit determined that Johnson & Johnson (J&J) subsidiary LTL Management’s attempt to shield its parent company from potentially billions of dollars in talc litigation liability failed the financial distress requirement, a U.S. bankruptcy judge in New Jersey is considering whether to allow a second bankruptcy by LTL. The litigation involves tens of thousands of claims that Johnson’s Baby Powder and other talc-containing products were contaminated with asbestos and other impurities that contributed to ovarian cancer diagnoses.
Following the dismissal of the first bankruptcy attempt in April, J&J said it was willing to pay $8.9 billion to settle tens of thousands of claims—up from the $2 billion price tag the consumer healthcare giant had offered in 2021 to settle the suits. The settlement hinges on a second bankruptcy attempt by LTL Management. J&J said its latest proposal has the blessing of about 60,000 talc claimants.
Our attorneys, who represent many of those clients, were quick to issue a release exposing the sham of the settlement for what it is—a second attempt at bankruptcy and an effort to shortchange cancer victims. A conservative estimate of the treatment costs and lost wages of just one ovarian cancer victim in this litigation averages nearly a half million dollars, even without complications. The medical costs of mesothelioma victims are even higher. J&J’s proposed $8.9 billion offer would translate to less than $120,000 per claimant.
In a May filing, U.S. Trustee Andrew R. Vara, who is overseeing the J&J/LTL bankruptcy scheme, filed a motion to dismiss it as the fraudulent Chapter 11 reorganizing case that it is. He said J&J and LTL’s plan shows their “mistaken belief that the best cure for bad faith is more bad faith.” Vara added that “LTL is nothing more than J&J’s captive … [LTL] exists solely to get J&J out of a jam as cheaply as possible.”
The U.S. bankruptcy judge is expected to decide soon whether LTL’s second bankruptcy attempt should proceed. Beasley Allen is monitoring this situation closely. We remain firmly against J&J’s attempt to cheat cancer victims and won’t give up on our fight for justice on our clients’ behalf.
The post 3rd Circuit: J&J’s 1st Bankruptcy Try Fails Financial Distress Requirement appeared first on Beasley Allen.
